ORIGIN & FUNCTIONS

The State Retirement and Pension System administers the survivor, disability and retirement benefits covering State and local government employees, teachers, State police, correctional and law enforcement officers, judges, and legislators.

Under one Board of Trustees, the State Retirement and Pension System consolidates the Pension System for Employees of the State of Maryland and the Employees' Retirement System, the Pension System for Teachers of the State of Maryland and the Teachers' Retirement System, and the State Police Retirement System. Prior to this consolidation, retirement and pension systems functioned separately. The earliest began in 1927 when the Teachers' Retirement System was established (Chapter 344, Acts of 1927). The Employees' Retirement System formed in 1941 (Chapter 377, Acts of 1941). Thereafter, the State Police Retirement System started in 1949 (Chapter 349, Acts of 1949). In 1970, these three systems were placed under the Department of Personnel. In 1979, the Pension System for Employees of the State of Maryland, and the Pension System for Teachers of the State of Maryland were created (Chapters 23, 24, Acts of 1979). From these systems, the Maryland State Retirement and Pension Systems formed in 1982. When the pension law was recodified in 1994, the Maryland State Retirement and Pension Systems was renamed the State Retirement and Pension System (Chapter 6, Acts of 1994).

In 1982, the Board of Trustees for the State Retirement and Pension System was created (Chapter 506, Acts of 1982). The Board establishes rules and regulations to administer the several pension systems and manage pension funds. On matters concerning the operation of the pension funds in the System, the Board selects an actuary as its technical adviser. From the Board, each member and beneficiary receives a summary of the System's annual report and of the individual's vested benefits.

To arrange and evaluate all medical examinations required under the laws of the several pension systems and to investigate all applications for disability retirement, the Board designates one or more medical boards. The boards each are composed of three physicians ineligible to participate in these pension systems.

Fifteen members constitute the Board of Trustees. Twelve serve four-year terms. Of these, seven are appointed by the Governor, and five are elected by the members and beneficiaries of the State Employees', State Police and Teachers' pension and retirement systems. Three serve ex officio. (Chapters 543 & 535, Acts of 2013; Code State Personnel and Pensions Article, secs. 21-104 through 21-127).

The Board of Trustees is assisted by five committees: Administrative, Audit, Corporate Governance, Investment, and Securities Litigation.

ADMINISTRATIVE COMMITTEE
The Administrative Committee originated as the Executive Committee and received its present name in 2004. The Committee reviews the governance practices of the Board of Trustees and makes recommendations to the Board regarding the operation and organization of the State Retirement Agency. The Committee also assists in the analysis and approval of the Agency's annual budget request and legislative proposals. In addition, the Committee monitors implementation of: the Agency's long-range strategic plan; the annual business plan; service quality standards; and certain litigation matters involving the System.

Chosen by the Board of Trustees, the Committee has seven members.

AUDIT COMMITTEE
For the Board of Trustees, the Audit Committee oversees preparation of the Comprehensive Annual Financial Report and the periodic assessment of retirement system risk management. The Committee also monitors the conduct of external audits of System financial statements, internal audits of Agency operations, and audits of local government employers.

The Committee is composed of five members chosen by the Board of Trustees. A majority must have financial or management experience.

CORPORATE GOVERNANCE COMMITTEE
The Corporate Governance Committee was created in March 2004 as a subcommittee of the Investment Committee. In October 2009, it was reconstituted as a standing committee to advise the Board of Trustees on matters of corporate governance and proxy voting.

The Committee advises the Board on public policy and on issues related to corporate governance, including statutory mandates; the integrity of capital markets and market participants; hiring or termination of advisors, including providers of proxy monitoring and voting services; and changes to proxy voting guidelines of the System.

INVESTMENT COMMITTEE
Providing advice to the three boards of trustees of the respective retirement systems, the Investment Committee was first authorized in 1958 as the Investment Advisory Committee (Chapter 70, Acts of 1958). The Committee reformed as the State Investment Council in 1982 (Chapter 506, Acts of 1982). In 1988, it reorganized under its present name (Chapter 698, Acts of 1988).

The Investment Committee reviews all investment programs to ensure compliance with policies of the Board of Trustees and advises the Board on all matters pertaining to investment programs. The Committee also advises the Board on preparation and maintenance of an investment operations manual and any additional bonding of employees of the State Retirement Agency.

From its membership, the Board of Trustees annually appoints the Investment Committee (Code State Personnel and Pensions Article, secs. 21-114 through 21-116).

As needed, the Committee provides recommendations to the Board on securities litigation matters, including whether the State Retirement and Pension System should seek lead plaintiff status in a securities class action lawsuit, opt out of a class action settlement, or file a separate securities-related action. The Committee also advises the Investment Division and the Office of Attorney General on issues arising during litigation.

An agency of the Board of Trustees, the State Retirement Agency administers the several State pension systems. The Executive Director is appointed by the Board (Code State Personnel and Pensions Article, secs. 21-117 through 21-123).

Under the Agency are five Divisions: External Affairs; Finance; Information Systems; Investment; and Retirement Administration.

In addition to media relations, the Division manages communications with: the General Assembly, System members and retirees, member associations, and the general public. The Division provides information about goals and policies of the Board of Trustees, functions and procedures of the Agency, and the rights and benefits of the State Retirement and Pension System.

In 1982, the Investment Division originated as the State Investment Agency under the State Retirement and Pension System (Chapter 506, Acts of 1982). Functions of the State Investment Agency reorganized through the Investment Division under the State Retirement Agency in 1988 (Chapter 698, Acts of 1988).

The Division invests, manages, controls, and performs investment accounting functions for the Retirement Accumulation and Annuity Savings Funds of the System (Code State Personnel and Pensions Article, sec. 21-122).

Four units come under the Division: Fixed Income, Absolute Return, and Real Return; Private Equity; Public Equity; and Real Estate and Credit.

Under the State Retirement Agency, the Retirement Administration Division formed in 1988. The Division pays benefits to retirees, and administers employee contributions. Retirement counseling is provided to individuals and in group sessions.

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